Big plans

Mumbai, May 23: DLF, the real estate developer, is shortly expected to announce the price band of its long-awaited initial public offering. It is believed that DLF could announce a price band of Rs 500 to 600 per share.

The DLF issue was cleared by the Securities and Exchange Board of India recently.

Although sources close to the company had indicated that the IPO was most likely to hit the markets within the next 90 days, it is now learnt that the offering could open in the second or third week of June.

DLF had filed its first draft red herring prospectus in May 2006. The company had then planned to enter the capital markets with an offering of 20.2 crore equity shares.

The issue comprised a fresh issue of 18.7 crore shares by the company and an offer for sale of 1.49 crore shares. There was also a greenshoe option of up to 1.7 crore shares.

However, the IPO was delayed on account of a major correction in the stock markets. Moreover, there was a controversy over the issue of rights debentures in early 2006.

In August 2006, DLF withdrew the prospectus to incorporate information pertaining to its accounts and other business developments.

DLF, which is the largest real estate company in India, filed a fresh prospectus in January this year. This time, the company pruned the size of the issue to 17.5 crore shares from 18.7 crore earlier.

Sources said that based on the price band of Rs 500 to Rs 600 per share, DLF could raise between Rs 8,750 crore and Rs 10,500 crore.

Though this is less than the Rs 13,000 crore that was talked about at one point of time, DLF’s IPO will be the largest offering in India’s capital markets.

Most of the other big ticket offerings have raised a little over $1 billion. Further as DLF is offloading a little over 10 per cent of its equity, it could be valued at around $20 billion. DLF will thus have the highest valuations among real estate entities and it will overtake Unitech, which is valued at around $11 billion.

DLF has a land bank of 10,225 acres that is spread across 31 cities including high-priced locations like Mumbai and New Delhi.